Forget all the hype about the new health-care law. If you already have health insurance, it will help you stay insured. If not, you may be out of luck.
Workers who have medical coverage at one job, and quickly move to a new job that also includes health benefits, will fare best. The law says your new company can't use your medical history to deny you insurance.
That's a huge improvement for people with disabilities or chronic illnesses like heart disease and cancer. In the past, if they were laid off or switched jobs, they might not be covered under the new employer's plan -- for the very conditions that made them desperately need insurance.
How about people without health insurance who later get jobs that include it? The new law says these workers (and their spouses and children) can't be permanently closed out of the new company's plan just because of a "pre-existing condition" -- a physical or mental condition they had before enrolling in the company plan. Still, a number of pitfalls remain:
Trap No. 1: Any time you're switching into a group plan or from one group plan to another, coverage for a pre-existing condition might not kick in for 12 months (18 months in some cases). If you had health insurance before you joined the company (for instance, if you were covered under a spouse's plan or had an individual policy), you're supposed to get credit toward the waiting period.
Trap No. 2: A loophole in the law might prevent you from getting that credit, says Paul Hamburger, a lawyer in Washington. Companies are bound to argue that you shouldn't get a credit when the plan you're switching out of covers different things from the one you're joining. (Prescription drugs, which some plans pay for but others don't, are one example.)
Things also get tricky if you have a gap in your coverage -- let's say because you were out of work for a while and couldn't afford insurance. When that break lasts more than 63 days, the clock gets set back on pre-existing conditions. You'll have to wait a year from the date you enroll in the new employer's plan (18 months in some cases) for these conditions to be covered.
Another problem with this whole system is that so many people have jobs without benefits. Some of them work full-time for a company but aren't entitled to benefits since they're classified as free-lancers or temps. Nothing in the new law requires a
company to insure these workers, says Richard Stover, a health-care expert with Buck Consultants in Secaucus, N.J.
Free-lancers' Catch-22: You have the right to buy an individual policy through a private insurer if you've had insurance for the past 18 months and your most recent coverage was through a group plan. How might you get it? You could be insured under your spouse's plan or buy group coverage through a trade, fraternal or religious organization. Wilkinson Benefit Consultants in Towson( 296-3030) can prepare a detailed analysis of several plans that could meet your needs (cost: $270).
When the new law takes effect (July 1, 1997, at the earliest, and Jan. 1, 1998, for most plans), rates for individual policies will go up, industry experts say. That raises the question of whether you'll be able to afford whatever insurance you're entitled to.
"You can have all the access in the world, but if you don't have affordable coverage, access is no good," says David Lack, executive director of the Council for Affordable Health Insurance in Alexandria, Va.
Meanwhile, there is one thing you can do to protect the few advantages you have under this law. If you're covered under a company plan, be sure to continue your coverage even if you lose your job or switch to free-lance work, advises Hamburger, the lawyer.
Once company-subsidized coverage ends, the federal law known as COBRA entitles most people to continue their group health insurance for at least 18 months. Your previous employer can require you to pick up the tab for the part of the premium the company used to pay.
The high cost of COBRA coverage may shock you, especially at a time when you're probably pinching pennies. Unfortunately, it's money you may have to spend to benefit from this supposedly worker-friendly law. By the time COBRA coverage ends, you'll either have a new job with benefits, or be eligible to buy an individual plan.
Deborah Jacobs welcomes letters from readers and will address topics of general interest in this column. Contact her by e-mail (DJWorkingaol.com) or by letter at Chronicle Features, 870 Market Street, Suite 1011, San Francisco, Calif., 94102. Please include your name, address and telephone number.
Pub Date: 9/08/96